COUNCIL REPORT: FEES AND CHARGES BYLAW AMENDMENT – SEWER USER FEES

FEES AND CHARGES BYLAW AMENDMENT – SEWER USER FEES

RECOMMENDATION:

THAT the report dated September 16, 2025, from the Director of Finance titled “Fees and Charges Bylaw Amendment – Sewer User Fees” be received.

ALTERNATIVE OPTIONS:

Council may choose to keep sewer rates at 2024 levels or increase or decrease the rates by an amount other than is recommended. Doing so will result in a deficit or surplus to the extent that sewer user fee revenue is sufficient to recover the costs of operating and maintaining both View Royal’s and the allocated share of CRD’s sanitary sewer systems. Any deficit or surplus in sewer revenue is funded or retained by the Sanitary Sewer Fund.

PURPOSE:

To consider an amendment to Fees and Charges Bylaw No. 958, 2016 to authorize the collection of sewer user fees to recover the estimated costs to operate and maintain the sanitary sewer service to connected View Royal constituents.

BACKGROUND:

Per Community Charter Section 194, Council may, by bylaw, impose a fee payable in respect of a municipal service. The municipality must make available to the public, on request, a report respecting how a fee imposed under this section was determined.

In 2020, View Royal established a sewer user fee structure based on both water consumption (year-round consumption for institutional users and annualized winter consumption for non-residential and residential users) and a three-tier progressive rate structure for institutional and non-residential users (see Sanitary Sewer Rates and Regulations Bylaw No. 397, 2000).

The 2025-2029 Financial Plan establishes sewer user fee revenue targets based on estimated costs for operating and maintaining View Royal's sanitary sewer system, and the CRD sewer requisition. It is important to note the View Royal has no control over the requisition imposed by CRD. A total of $2,688,889 (2024 - $2,493,196) is required from sewer user fees to recover the costs of both View Royal’s and CRD’s sanitary sewer systems, representing a total revenue increase of 7.42% from 2024 and an increase to the average residential dwelling (86 m³ consumption/172 m³ annualized) of $26.

ANALYSIS:

Staff recommend increasing View Royal Sanitary Sewer Usage fees by 2.38% and CRD Sanitary Sewer Usage fees by 8.52%. These increases will result in a combined annual increase of $26 for the average residential dwelling (86 m³ consumption/172 m³ annualized), consisting of a $4 increase for View Royal services and a $22 increase for CRD services. Sewer rates year-over-year comparison are presented in Attachment 2.

The table below shows the residential impact of the 2025 rates based on an average consumption of 172 m³, annualized (2024 – 170m³).

This recommendation aligns with the target Sewer Usage Fee revenues totaling $2,688,889 established in the 2025-2029 Financial Plan, which includes $985,189 for View Royal fees and $1,703,700 for CRD fees.

The recommended amendment does not change the $100 total minimum fee, however, the split between the View Royal and CRD components shifted by $1 – View Royal’s component decreased from $38 to $37 and CRD’s component increased from $62 to $63, based on the component cost percentage relative to total budget.

To achieve the established revenue targets, a weighted total rate increase of 6.19% is required, which accounts for revenues from each customer class, factoring in increased billable consumption of 7,200 m³ and total consumption of 987,600m³ (2024 – 980,400m³).

Projected revenue from each user class, based on the proposed rates, is shown below. Non-residential and institutional user classes contribute a slightly higher proportionate share of the total revenue due to the progressive tiered rate structure.

Sewer Capital Reserve

The 2025 View Royal revenue requirement incorporates a gradual increase in contribution to reserves to support future sewer infrastructure replacement, based on the Town’s inaugural Sustainable Infrastructure Replacement Plan (SIRP) received by Committee of the Whole December 13, 2022. A recommendation of the SIRP is to increase sewer user fees by 5% every year for five years as part of the overall approach to closing the Town’s overall infrastructure replacement funding gap.

The SIRP-recommended 5% increase calculation is based on increasing both the View Royal and CRD portions of the user fee. SIRP-related contributions to sewer capital reserve began in 2024, with a contribution of $22,500 representing a 2.5% increase in only the View Royal portion of sewer user fees. The 2025 Financial Plan includes a transfer to reserve of $49,500, representing a 5% increase in only the View Royal portion of sewer user fees. As part of the 2026 financial planning process, staff will revisit the calculation of the SIRP-related reserve contributions to include the CRD portion of user fees in the calculation, to ensure sustainable reserve levels in the future.

The table below represents reserve projections for the Sewer Capital Reserve based on the adopted 2025-2029 Financial Plan.

An amendment to the Fees and Charges Bylaw (No. 958) Schedule A is required to amend the sanitary sewer rates. The proposed bylaw follows this report as Attachment 1 – Proposed Fees and Charges Bylaw No. 958, 2016, Amendment Bylaw No. 1158, 2025.

Property owners can access their sewer utility account information online, such as viewing water consumption and yearly variances, and may opt to receive their invoice via email. The fall newsletter, website and social media messaging will advise property owners to watch for their sewer utility invoice, how to pay their invoice and how to access their account information online. Messaging will also include information about how their invoice is calculated and how consumption affects the amount they pay.

Impacts and implications can be summarized as follows:

• Community Impact: View Royal constituents’ health is supported by a well-maintained sanitary sewer collection system. The system will continue to be managed effectively when sufficient resources are allocated to maintain the system today and in the future.
• Financial Implication: In 2024, the sewer user fee paid by the typical single-family residential property owner with winter water consumption of 86 cubic metres was $417. If consumption for the property is the same as last year, a 6.19% sewer user rate increase would increase the sewer user fee by $26 to $443. The actual amount billed will closely reflect changes in consumption; as consumption increases, the sewer utility invoice will increase by a similar percentage. The 2025 Financial Plan resulted in a total Sewer Fee Revenue increase of 7.42% from 2024.
• Inter-governmental Relations Impact: None.

ALIGNMENT:

The recommended option aligns with the Town’s following core guiding documents as follows:

Strategic Plan: Financial Sustainability and Service Excellence: Financial sustainability is supported when recurring operating costs are recovered through recurring and predictable revenue sources, such as user fees, over which Council has a measure of control. View Royal’s sanitary sewer service operating costs are funded almost entirely by user fee revenue, therefore are sustainable to the extent that user fees don’t exceed the consumer’s ability to pay.

Additionally, the 2025-2029 Financial Plan considers recommendations from the Asset Management Strategy continuing the goal of financial sustainability by increasing contributions to sewer capital asset replacement reserves.

PUBLIC PARTICIPATION GOAL:

The desired level of public participation for the recommended option is: [x] Inform [ ] Consult [ ] Involve [ ] Collaborate [ ] Empower [ ] N/A

TIME CRITICAL:

A bylaw to establish rates for the recovery of costs relating to the sanitary sewer service must receive final reading and adoption prior to mailing the 2025 sewer utility invoices. If the first three readings are completed at the October 7, 2025 Council meeting, adoption can occur at the October 21, 2025 Council meeting, with invoices mailed shortly thereafter.

ATTACHMENTS:

• Attachment 1 – Proposed Fees and Charges Bylaw No. 958, 2016, Amendment Bylaw No. 1158, 2025.
• Attachment 2 – Sewer User Rates Year-Over-Year Comparison